ASX futures are pointing up again today, following a surge in US equity markets overnight. The cause? Well, once again the markets are staking everything on the words and actions of one man – they have few other options, to be fair.
The Dow Jones closed 419.5 points or 1.1% higher, the S&P 500 added 1.7%, and the Nasdaq gained 408 points or 2.5%.
Will he, won’t he?
This rally was spurred by renewed hopes for a resolution to the US-China trade impasse and a back-pedal from Donald Trump on whether he means to fire US Federal Reserve Chair Jerome Powell – the latest pronouncement is that he does not.
Trump’s latest stance helped calm the farm on the Fed’s independence, though gains were later tempered after US Treasury Secretary Scott Bessent downplayed prospects of a swift resolution with China and ruled out a unilateral tariff reduction on imports from that country.
Of course, the highly exposed tech sector bounced the highest, along with consumer discretionary, each climbing between 2.8% and 2.9%.
The markets responded well to Elon Musk’s pledge to reduce his political engagements to focus on corporate leadership, with his flagship Tesla Inc moving up 5.4% even as the company reported a 71% drop in quarterly net income.
Boeing Co also lifted market sentiment, posting a narrower-than-expected quarterly loss, with its shares rising between 2.4% and 3.9%.
Eurozone follows suit
European sharemarkets followed suit, with the FTSEurofirst 300 index up 1.8%. The basic resources sub-index surged 3.4% on easing trade tensions.
SAP SE soared 10.6% after beating first-quarter earnings forecasts, lifting the broader technology sector by 4.0%. London’s FTSE 100 index rose 0.9%.
Economic data from the US showed mixed signals. The S&P Global manufacturing purchasing managers index (PMI) edged up to 50.7 in April, indicating modest growth, while the services PMI declined to 51.4.
New home sales exceeded expectations, rising 7.4% to an annualised rate of 724,000.
Bond markets were mixed. The yield on 10-year US Treasuries held near 4.39%, while the 2-year yield climbed 9 basis points to 3.88%.
A US$70 billion auction of 5-year notes was met with strong demand, clearing at 3.995%.
Currencies and commodities
Currency markets saw declines against the US dollar. The Euro fell to US$1.1310, the Australian dollar to US63.55 cents, and the Japanese yen to ¥143.50.
Commodity prices reflected shifting investor sentiment.
Gold futures slumped 3.7% to US$3,294.10 per ounce, while Brent crude dropped 2.0% to US$66.12 per barrel as reports surfaced of a potential OPEC+ supply increase. Iron ore futures rose 0.2% to US$100.09 per tonne.
Today, Australian investors will be eyeing detailed labour force and payroll data.
US jobless claims, durable goods orders and the Chicago Fed index are due. Earnings are expected from Alphabet, Intel, Merck, PepsiCo and others.
Market snapshot
- ASX futures: +0.2% to 7,946 points
- Australian dollar: -0.1% to 63.51 US cents
- S&P 500: +1.7% to 5,375 points
- Nasdaq: +2.5% to 16,708 points
- FTSE: +0.9% to 8,403 points
- EuroStoxx 600: +1.8% to 516 points
- Spot gold: -2.8% to $US3,288/ounce
- Brent crude: -1.9% to US$66.16/barrel
- Iron ore: flat at $US100.25/tonne
- Bitcoin: +0.2% to $US93,892
Source: the ABC